Currently, it is common practice for an “Eligible Individual” as defined by Section 223 of the Internal Revenue Code (“Code”) to have, on deposit with a custodian or trustee, funds maintained as a Health Savings Account (“HSA”). As defined by Section 223 of the Code, an Eligible Individual is a person who: (1) is covered by a qualified High Deductible Health Plan (“HDHP”); (2) is not receiving benefits under Medicare; (3) is not covered by any non-HDHP; and (4) is not claimed as a dependent by any taxpayer other than the individual's spouse.
It is current practice for individuals to administer HSA's on their own. Accordingly, individuals typically establish an HSA directly with a financial institution that will serve as the Custodian or Trustee (herein collectively referred to as the “custodian”) of their HSA funds. Similarly, once an HSA has been set up, the individual holding the HSA (the “account holder”) typically works directly with the custodian of their HSA to administer the account. Accordingly, it is currently the account holder's responsibility to assure that the HSA is being properly administered. This can be difficult and time consuming for the account holder.
In light of the above, there is currently a need for systems and methods for facilitating the administration of HSA's, while assuring that HSA account holders comply with the applicable laws.